Investor Buying Continues to be a Major Player in the SoCal Real Estate Housing Market

California continues to draw heavy investor money from China alongside their massive boom over the last decade. Yet a big part of this is speculation and we actually see this via rents. Rentals are more reflective of what local families can pay. It is interesting to see in some highly desirable areas that rents go for $2,500 to $2,700 while homes are selling for $700,000 to $750,000. Foreign money is a big player in the current market and this is also very dependent on foreign economies sustaining their booms.

Chinese investors heavily favor coastal regions

The National Association of Realtors (NAR) recently released data on foreign real estate buyers. What was interesting is that the latest figures show that international buying is at an all-time record high coming in at $92.2 billion dollars of volume.

In other words, not only are locals being priced out but even professionals in the area are being priced out because of added international competition.

Source: NAR

Volume of purchases is still largely driven by Canadians but they are looking at other areas outside of California.

And the boom in China is definitely impacting local markets here in SoCal:

The point of this is that foreign money is speculating in certain markets in California. If you are buying in the Inland Empire or Central Valley, you probably won’t face much competition from foreign money. But if you are looking at buying in San Marino, Arcadia, or Irvine get ready to face some international competition. For the housing industry, all money is green so as long as your cash or check clears, it is all good.